Boyu Seeks $1.4 Billion for Starbucks China Takeover

Deal Overview - Starbucks is selling a majority 60% stake in its China unit to private equity firm Boyu Capital for $4 billion [1][3] - Boyu Capital will finance the deal with over $1 billion in leveraged loans from Chinese banks [3] Boyu Capital's Advantage - Boyu Capital, as a Chinese private equity firm, possesses stronger onshore connections beneficial for Starbucks in China [2] - Boyu's connections and strategy helped it beat out other global private equity firms interested in the stake [4] - Boyu recently closed a big deal for China's biggest chain of luxury malls, SKP, potentially creating synergies for Starbucks outlets [3][4] Starbucks' China Strategy - Starbucks has been facing pressure from local Chinese coffee chains like Luckin, which has surpassed them in size [5][6] - Starbucks has maintained a premium model with higher prices and larger stores, differentiating itself from competitors [6][7] - The entry of private equity may lead to significant changes in Starbucks' China strategy, potentially focusing on faster margin growth [7][8] - The future Starbucks in China might be unrecognizable from Starbucks elsewhere, with a Chinese firm now in charge [8]